Even though our country is going through the worst effects of the Kovid-1 epidemic, with rising inflation, labor and wage pressures, and rising interest rates, supply chain problems continue. While Americans work to understand all this – and plan around it – the lack of financial literacy makes it difficult for many. In the long run, this lack of knowledge has jeopardized the American dream for millions of people. We believe that private-sector employees, families, customers, and communities have the opportunity and responsibility to address this issue with increased access to financial education.
There is a great need for such efforts. Today, about one-third of Americans deal with interest rates, mortgage rates, and financial risk, according to the Financial Industry Regulatory Authority. And this measure of financial literacy has dropped by 19 percent in the last decade. The gap is estimated to cost Americans more than 15 415 billion in 2020 alone.
Lack of financial capacity is affecting Americans both at home and at work. Stress on money is associated with significant health conditions, including heart disease, diabetes, sleep problems, and depression. This can be an expensive treatment for a life-threatening condition, which in turn creates more financial stress and anxiety. Financial difficulties are now the second leading cause of divorce. At work, 97% of employees admit that they have spent time on the job or are worried about money. Mental illness costs employers about billion 1 trillion annually for productivity, and 4 out of 5 employees admit to being financially stressed.
Black America is particularly affected by these challenges. More than half (54%) of black Americans have a credit score below 640, largely unable to fully participate in Free Enterprise America. Half (54%) of black Americans also report live pay-check-to-pay-checks, compared to 44% of Americans overall. Only 43% of blacks own their homes, compared to 432% of whites. Blacks make up 14% of the population, but only 3.5% own small businesses.
These are more than just statistics. There are real people behind the numbers: millions of parents, seniors, and young people endure financial stress, personal hardship, and stressful relationships as they provide greater financial stability, flexibility, and security, and struggle for savings, borrowing, and investment.
To help solve this problem, we’re coming together for a vice president of financial literacy for all, an inclusive, business-led movement to help more Americans overcome the benefits that come with making more sound financial decisions. We plan to empower lower-middle-income individuals and families in every background, every walk of life, and every community – from urban to rural and all points in between. We will create excitement and awareness about financial literacy using the creative brilliance of our partners; Through our partners, increase workplace wellness for functional adults; And supports initiatives to provide basic financial education in every school district in the country. And, because of the wealth gap facing black and Hispanic families, we will ensure that our efforts are relevant and readily available in those communities.
Since its launch in May last year, all movements for financial literacy have been joined by the Walt Disney Company, the National Football League, the National Basketball Association, Delta Air Lines, and about three hundred other CEOs and board chairmen. A few more top financial institutions.
We believe that financial literacy can be inclusive, creative, flexible, and focused on results, and we believe that the diversity of our alliances will help us make meaningful progress towards that goal. Disney, after all, specializes in attracting and entertaining people through the power of storytelling. The NFL and NBA know how to attract and inspire enthusiastic viewers. Operation HOPE focuses on equipping people with financial tools to build a more secure future. And deeply connected to the Walmart community, 1.6 million affiliates, including more than 4,700 stores, serve more than 137 million customers a week in the United States. Each member organization will do more for its employees and the community.
Our shared passion for improving financial education lies in our motives and values. About 100 years ago, Walmart was founded to help people save money so that they can live better. Since 1992, Operation Hope has sought to expand economic opportunities and make free enterprise work for everyone. We all see this new initiative as a natural extension of what our organizations have been doing for decades.
We know that such efforts can make a difference. As just one example, Operation HOPE is providing free, personalized financial training and education to some, increasing their credit scores by 54 points in six months and more than 100 points in 24 months, helping to reduce debt levels and prepare clients for emergencies and their future. Increase savings. And, in some cases, helping strivers to become homeowners from tenants, or from small business dreamers to small business owners.
We understand that the financial challenges facing millions of American families cannot be overcome by financial training alone. Other issues also hold people back, including education, vocational training, financial services, job opportunities, and barriers to all forms of discrimination. These barriers also need to be addressed – and many in the private sector are making significant progress
Nevertheless, we believe that better, more accessible financial education and higher financial literacy can help millions of families. This and similar work carries ‘all boats’ across the community and across our nation. Increased GDP growth through increased financial intelligence, benefits society as a whole and creates more sustainable opportunities for the nation. And the extra benefits less stressful citizens and workers translate into more social health for all. These are big goals, but we believe they can be achieved – and that’s the challenge we set for ourselves. We urge other business leaders to join this movement.